Nonfarm Payrolls Preview: Will Slower US Job Growth Push EUR/USD Higher?

The United States Nonfarm Payrolls (NFP) report for March is scheduled for release today at 12:30 GMT, and all eyes are on how this key employment data could shape the Federal Reserve’s next interest rate move and impact the US Dollar (USD) outlook.

What Are the March 2025 NFP Expectations?

Expected Job Gains: +135,000 (vs. +151,000 in February)
Unemployment Rate (UER): Forecasted at 4.1%
Average Hourly Earnings (AHE): Estimated +3.8% YoY (vs. +4.0% in February)

Backdrop: Tariff Shock Raises Recession Risks

President Donald Trump’s aggressive tariff measures, including a 10% blanket tariff on all US imports and higher rates of up to 50% for select countries like China, the EU, and Japan, have sparked recession fears across global markets. These moves have already prompted economists to downgrade growth expectations and forecast softer labor market conditions in the coming months.

The Fed held interest rates steady in March but signaled two potential rate cuts in 2025. However, the central bank’s decision will be heavily dependent on data, particularly the labor market and inflation trends.

What Does This Mean for the USD and EUR/USD?

The US Dollar Index (DXY) has been under heavy pressure due to rising concerns of economic slowdown triggered by the trade war. EUR/USD has surged to multi-month highs, testing levels above 1.1100 as investors anticipate a dovish Fed pivot.

If today’s NFP misses expectations and prints below 120,000, markets may begin pricing in a rate cut as early as May, likely weakening the USD further and pushing EUR/USD higher — potentially toward the 1.1150–1.1200 resistance zone.

Conversely, a strong NFP above 150,000 could slow down the EUR/USD rally, especially if wage growth also surprises to the upside, which might delay rate cut expectations.

EUR/USD Technical Outlook – Bullish Bias Remains

According to FXStreet Analyst Dhwani Mehta:

EUR/USD is hovering above 1.1050, its seven-month high
RSI remains in overbought territory, signaling possible short-term pullback
A sustained break above 1.1147 could confirm a fresh bullish leg toward 1.1200
On the downside:
- Immediate support: 1.0900
- Deeper pullback targets: 21-day SMA at 1.0860 and 200-day SMA at 1.0731

Key Takeaway for Traders

Today’s NFP release and Powell’s speech will likely dictate the short-term trajectory for EUR/USD. With high expectations for rate cuts and geopolitical uncertainty around US tariffs, any sign of labor market weakness could accelerate USD losses.

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Hamza Shah